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Home My WebLink AboutO-2002-2598 . . ORDINANCE NO. 2002-~$"t:t i AN ORDINANCE ADOPTING THE PROVISIONS OF TEXAS LOCAL GOVERNMENT CODE, CHAPTER 172, nTEXAS POLITICAL SUBDIVISIONS UNIFORM GROUP BENEFITS PROGRAMn, EFFECTIVE JANUARY 1, 2003, FINDING COMPLIANCE WITH THE OPEN ImETINGS LAW, AND PROVIDING AN EFFECTIVE DATE HEREOF. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LA PORTE: Section 1. The City Council of the city of La Porte hereby adopts Chapter 172, of the Texas Local Government Code, "Texas Political Subdivisions Uniform Group Benefits Program", which shall, to the extent applicable, govern the City of La Porte's medical benefits plan, effective January l, 2003. Section 2. The City Council officially finds, determines, recites, and declares that a sufficient written notice of the date, hour, place and subject of this meeting of the City Council was posted at a place convenient to the public at the city Hall of the City for the time required by law preceding this meeting, as required by the Open Meetings Law, Chapter 551, Texas Government Code; and that this meeting has been open to the public as required by law at all times during which this ordinance and the subject matter thereof has been discussed, considered and formally acted upon. The City Council further ratifies, approves and confirms such written notice and the contents and posting thereof. Section 3. This Ordinance shall be effective January 1, 2003. PASSED AND APPROVED, this 9th day of December, 2002. By: e e r;m' a l:L Marth '#Gil~ City Secretary AP~;x) Knox W. Askins City Attorney \0. EXHmIT "A" RECOMMENDATION Potential Board Members CHAPTER 172 COMPARISON - CITY OF LA PORTE COMMENTS City Council would determine composition of Board and designate members by ordinance. DISADVANTAGES Requires establishing a Board of Trustees to oversee funding / operations of the City's health plan. Anv ANTAGES Would provide statutory authority for City of La Porte's Employee Health Services Fund (medical fund) to operate legally as a self-funded entity. Legal staff Financial staff Administrative staff Council would determine level of Board participation / authority (recommending body, only, or actual decision-making body). Flexibility is allowed. City Attorney and staff to review prior to training. (2) 8-hour sessions OR (4) 4-hour sessions is preferred due to volume of information to review. Board might need to be covered by Errors & Omissions insurance based on level of authority. Sample prepared by TML- IEBP for review during training sessions. TML- IEBP will provide initial training at no cost to City. Training must take place within 180 days of designation. legislative session's Dependent on agenda. Should adopt a Trust Agreement to formalize trustees' responsibilities. Requires 16 hours of training annually for each Board member. Annual training after the first year may require a fee. May not offer total protection from mandated benefits legislation. Would provide guidelines for Board of Trustees to fund / operate the health plan. May offer protection from most mandated benefits legislation. fund Currently, City's health services could be at risk if challenged. Would provide a legal defense for challenges to the health plan. 1 Annual review by trustees would provide verification that the City's benefits book remains compliant. ch 172_comparison chart_021209,doc Last printed 1214120023:26 PM RECOMMENDATION Continue current practice. .. Continue current practices. Maintain on file an annual financial and claims audit for claims administrator. Continue to obtain excess Ioss/re-insurance as long as available and cost effective, to minimize risk to City's health services fund. - - - - - - - -- 2 COMMENTS City of La Porte already operates a separate, previously established fund (014) to account for health services revenues and expenses. City's existing investment policy follows the Public Funds Investment Act. All Employee Health Services funds are invested accordingly. DISADVANTAGES Must conduct an annual audit and submit to the Texas Department of Insurance (TDI). in Must invest funds per the Public Funds Investment Act. ADVANTAGES Must maintain all contributions a separate fund. Currently, Employee Health Services Fund is reviewed as part of the City's annual audit, which includes all Internal Service Funds. City currt?ntly carries excess loss insurance, although it is becoming more difficult to obtain; the number of providers of excess loss insurance is decreasing, especially for Texas. City may become Chapter 172 alone or with several other entities. Many updates already completed during 2002. Fund is required to carry excess Ioss/re-insurance or inform employees it is not provided or has been cancelled. TML-IEBP already operates as Chapter 172 for purposes of self-funded members. Allows for both single and group coverage participation. Must amend sections of City's health plan benefits book to be fully compliant. If cannot pay claims for 60 days, must declare insolvent and notify participating members. ch I 72_comparison chart_02I 209,doc Last printed 1214120023:26 PM .' ,,- .{ ....,.. ( '" e e Highlights of Requirements for Risk Pool under Chapter 172 Please consult your own legal counsel before attempting to set up a Chapter 172 Pool . Political Subdivision may self-fund accident, health, dental, and long-term disability for employees/dependents/retirees . Pool may be for single entity or multiple units through Interlocal Agreement . Contributions to the Pool must be maintained in a separate fund . Must make thorough investigation of background, experience, and financial qualifications of any Third Party Administrator or other entity employed to administer benefits . Must be operated by a Board of Trustees, and it is highly recommended that a proper trust document be adopted . Trustees must have 16 hours of training in specified areas dealing with establishment and operation of the Pool, within 180, days of appointment . Must either carry excess loss coverage or reinsurance, or notify each covered person that that there is no coverage, or that it has been cancelled ' . Must invest according to the Public Funds Investment Act or the Texas Trust Code . Must have annual fin,,:ncial audit by CPA and file audit with Texas Department of Insurance (TD!) . Trustees must declare insolvency if Pool is unable to pay claims within 60 days of verification . Special restrictions placed on counties . Pool coverage is not insurance and Pool is not subject to TDI regulation (entities operating outside of Chapter 172 may not enjoy this exemption)